(Updates with closing figures for U.S. stock indexes, dollar and bonds, adds details on oil and gold)
By Jennifer Ablan
NEW YORK, Sept 21 (Reuters) - U.S. stocks resumed their climb on Friday after a one-day break, as earnings from Oracle Corp. ORCL.O topped analysts’ estimates, while yield-hungry bargain hunters snapped up U.S. Treasury bonds.
The dollar took a breather from the severe selling pressure the currency has faced since the sharp interest-rate cut by the U.S. Federal Reserve on Tuesday, but only after dropping to a new low.
Gold jumped to the highest price since 1980, only to finish lower on profit-taking. U.S. oil futures prices slipped, but stayed above $81 a barrel — a day after hitting a record $84.10,
The euro was little changed on the day at $1.4086 EUR=, after weaker-than-expected euro-zone manufacturing data for September dragged the currency from a record high of $1.4120 hit overnight, according to Reuters data.
The dollar fell to a fresh 15-year low against a basket of currencies .DXY at 78.380 and then recovered to trade flat on the day.
But against the yen, the dollar gained 0.58 percent to 115.31 JPY= from 114.64 yen late on Thursday.
The Fed moved aggressively this week by slashing short-term U.S. interest rates half a percentage point in an attempt to restore confidence in the financial system after a severe freezing of mortgage and credit markets, which has rattled global financial markets.
The Dow Jones industrial average .DJI rose 53.49 points, or 0.39 percent, to end at 13,820.19. The Standard & Poor's 500 Index .SPX gained 7.00 points, or 0.46 percent, to finish at 1,525.75. The Nasdaq Composite Index .IXIC advanced 16.93 points, or 0.64 percent, to close at 2,669.83.
For the Dow and the S&P 500, this was their best week since late March. Each index gained 2.8 percent for the week, while the Nasdaq added 2.7 percent.
Friday marked the expiration of equity derivative contracts in the quarterly event known as “quadruple witching.” Volume was up as investors exercised their derivative positions or rolled them forward at the last minute.
“When you get close to options expiration, you probably have people covering (positions) who normally wouldn’t,” said Rick Campagna, portfolio manager at Provident Investment Council in Pasadena, California.
“Very good numbers” in earnings results have also been a factor, he said. “I think earnings will be good for the third quarter.”
Late Friday, Oracle’s shares were up 5.04 percent at $22.10 on Nasdaq after the company reported earnings and revenue that topped analysts’ estimates after Thursday’s closing bell. Citigroup and UBS raised their price targets on the stock of the world’s third-largest software maker.
Shares of Texas Instruments Inc TXN.N rose 2.4 percent to $36.63 on the New York Stock Exchange after it said its board had approved an additional $5 billion stock buyback, and the company plans to raise its cash dividend by 25 percent.
In overseas stock markets, though, Japan's Nikkei average .N225 declined 0.6 percent after the yen's gain against the dollar prompted investors to sell shares of exporters such as Canon Inc (7751.T). The Nikkei dropped 101.18 points to 16,312.61.
The FTSEurofirst 300 index .FTEU3 gained 0.47 percent, or 7.21 points, to finish at 1,546.28, after Goldman Sachs upgraded the auto sector. Merger and acquisition talk also whetted investors' appetite for stocks.
Oil prices slipped but held above $81 a barrel on Friday, a day after hitting a record above $84 as a tropical depression forced the shutdown of output in the Gulf of Mexico.
U.S. crude oil for November delivery CLc1 dipped 16 cents to settle at $81.62 a barrel. The October U.S. crude oil contract expired on Thursday after it hit a record for the seventh straight session at $84.10 in late electronic trading.
Oil has traded above $80 for the past week, despite OPEC’s decision last week to raise output in November. Among the factors keeping oil prices high are thinning U.S. inventories, a weakening dollar, the U.S. interest-rate cut that eased fears of a recession and concerns that storms could disrupt supply.
Spot gold prices XAU= was quoted at $732.50/733.30 in New York late Friday, down from late Thursday’s level at $734.20/735.00.
But that followed spot gold’s surge to $739 an ounce in Europe on Friday — its highest since January 1980.
COMEX most-active gold for December delivery GCZ7 surged to $747.10 an ounce, its highest level since 1980, and then gave up those gains as investors took profits to settle at $738.90 an ounce, down $1.00 for the day.
The Reuters/Jefferies CRB Index .CRB was down 0.17 of apoint, or 0.05 percent, at 333.15.
The skyrocketing price of oil and gold’s jump to the highest level in 27 years have begun to increase fears of inflation, particularly in the United States, where a weak dollar also makes foreign-made goods more expensive.
But U.S. Treasury bond prices, which have been battered this week by those inflationary fears, found bargain hunters on Friday, who were tempted by the jump in yields during the recent sell-off. Bond prices move inversely to yields.
The benchmark 10-year U.S. Treasury note US10YT=RR was up 17/32 in price, with the yield at 4.63 percent, down from 4.70 percent late on Thursday. The 2-year U.S. Treasury note US2YT=RR was up 3/32, with the yield at 4.06 percent.
Without a doubt, the most popular maturity of the day was the long end of the Treasury yield curve.
The 30-year U.S. Treasury bond US30YT=RR was up more than a full point, with its price rising 1-8/32 to 101-23/32, while its yield fell to 4.89 percent from 4.97 percent late on Thursday. (Additional reporting by Caroline Valetkevitch, John Parry, Nick Olivari, Gene Ramos and Frank Tang in New York, Jeremy Gaunt and Sitaraman Shankar in London and Elaine Lies in Tokyo )